Is your Real Estate Agent doing the whole job for you or is he running away after the sale?

Many real estate agents willingly take short sale listings, but for agents to accept your listing without taking full responsibility for your re-location, is only doing half the job. Our clients have done us a great service by trusting us to handle their sale. As a result, we owe it our clients to help them find a new home; not to walk away after the short sale is completed!

Most people prefer to lease a home in the same community after their home closes

The majority of people who short-sell their home usually lease a home after the home closes, and they still want to remain in the same community. This is where they have lived for many years, where their children have gone to school, and where they have established many friendships. A good real estate agent will always begin by keeping their clients up-to-date on available home leases during the course of the short sale — easy to do through their local multiple listing services. This should always be followed by home showings and working with other agents to find potential rental possibilities.

Why do some agents neglect their clients after the sale?

Yes, I know this sounds harsh, but it comes down to commission, knowledge, plus the amount of work involved in helping people find a lease, especially if they have credit challenges. A short sale pays a standard sales commission while a lease pays very little; usually only a few hundred dollars. Many agents prefer to move on to another sale rather than spending their time and energy pursing a lease. They may also lack knowledge about leasing and rental law, since the majority do very few leases each year. Last, they may get discouraged if their applicants are regularly rejected because of credit challenges.

How difficult is leasing a home after a short sale?

The biggest challenge in renting or leasing a home after a short sale is overcoming the damage to the client’s credit rating. Because a short sale is a distress sale, the sellers may have many late payments (including missed mortgage payments) which will have downgraded their credit scores. Leasing a home with poor credit can be very difficult. Most landlords are wary of leasing to someone with low FICO scores and derogatory items on their credit report. The best solution is to get a qualified co-signer. Perhaps there is a friend or family member who is willing to help? There are also professional co-signing services that will assist you for a fee. This is often the best solution for people who want to keep their financial affairs discreet and private. There are also other alternatives like paying more rent up front or paying a higher security deposit. See my web page for additional solutions, here.

Should you look for a lease now or after escrow opens? Two strategies

For many clients, the emotional strain of the short sale and loss of their home is devastating. In this case, I usually advise them to move out, well before the house sells. Emotionally, putting the old home behind them and settling in to a brand new place might be the best solution. It may also have credit rating benefits, as the full impact of the sale and missed mortgage payments may not yet be fully reflected on their credit report.

For other short sale clients, the goal may be to stay in their home as long as possible. For these clients, we generally start looking for homes shortly before escrow is opened. The advantage is the reduced cost of not having to pay rent until they are close to closing on their home. The disadvantage of course is the shorter search “window”. This means that we will have to aggressively pursue a new home so that it will be secured before escrow closes.

Be prepared to be flexible in your choice of homes

If your credit is poor, you may not be able to lease any of your top home choices. Instead, consider accepting a home where the landlord is willing to work with you, even if the home is a bit less than ideal. Older, less updated houses, vacant rentals, and homes that have been on the market for a long time are good candidates. In any case, be prepared to show some flexibility in your choice of homes.

Be sure to use a real estate professional to assist you!

It may be tempting to shop for a lease on your own using the newspaper, Craigslist, or other media. Use caution though — there are many leasing scams out there. The first concern is ensuring that the person you pay your deposit to, is in fact the actual owner of the home. Never give cash or a deposit check to someone unless you are certain that he/she is the legally entitled owner of the property. Second, many people who are in foreclosure are leasing their homes out to collect some cash before the bank takes it back. I have received numerous calls from tenants who have leased a home, only to find out later that the home is in foreclosure. The biggest issue (aside from finding a new home) is the disposition of their security deposit. To avoid problems later,I recommend that you always use a licensed real estate professional to assist you with your lease. Ask that your agent check all potential lease homes for notices of default (NODs), liens, paid property taxes, and loan-to-equity position, to ensure that the landlord is financially sound.

My team will help you after your sale!

We will never do half the job! My team are short sale and leasing experts. If you trust us with your short sale, we will work very hard to help you find your new home. We do this by aggressively screening potential rentals to find landlords who are flexible and willing to consider your application. One of our team members will also be happy to work with you on showing these homes. Please contact me at (949) 290-3263 to see how my team can help you with your short sale , and with a new lease after the sale.